Skills shortage 'is London's big barrier'

The shortage of skilled staff has overtaken transport problems as the biggest barrier to business in London for the first time, a survey showed today.

Almost two-thirds of employers - 61 per cent - face skills shortages, an increase from 49 per cent last year, the CBI employers' group said. Companies in the property, professional services and - ironically - transport sectors were the worst affected, it showed.

The biggest problem is recruiting staff with specialist skills, but general skills such as communication and team-working, as well as basic literacy and numeracy deficiencies, were also a concern, employers said.

The difficulty in recruiting skilled staff may also be having an effect on off-shoring, with the proportion of companies moving research and development work overseas doubling in a year.

The survey, by the accountants KPMG, showed fears over the transport network was the second-biggest barrier to business in the capital, with regulation ranked third and lack of office space fourth. Despite this, businesses are increasingly positive about London as a place to do business with half saying it is "very good" and 45 per cent "good".

Sir Digby Jones, the director-general of the CBI, said: "While it is positive news that London is still seen as a good place to do business, employers are right to be concerned about the difficulty in finding staff equipped with basic and more advanced skills. Business does not expect young people to have all the skills to do a specific job but surely it is not asking too much of the Government to ensure school leavers have the ability to add up, read and write."

Ian Barlow, at KPMG, said: "Addressing the skills shortage issue needs to be a priority for policymakers, while London's employers also have their part to play. If we want to continue to build world-beating companies, then employers need to have access to a skilled workforce."